As London’s new Mayor, Sadiq Khan has a lot of work ahead of him if he is to deliver on the plans and pledges that helped him into his new position. Among those promises which are coming under increased scrutiny is housing. Specifically, Mr. Khan’s plan to ensure at least 50% of new housing built in London is affordable for Londoners.
“I am determined to fix London’s housing crisis and ensure that all Londoners have the opportunity to rent or buy a decent home at a price they can afford, but the scale of the challenge is now clearer than ever and we’re not going to be able to turn things around overnight,” Mr. Khan said. “We will be outlining our plans in the coming months.”
This is more than just a noble idea that could help a large number of people in a popular city with a population that is growing by around 100,000 per year. If Mr. Khan wants London to remain a premium destination for the financial services elite as well as every other type of city worker and visitor, then something must be done to help solve the current situation which is being hailed by many as a ‘housing crisis’.
There has been much discussion on this topic in the scant few weeks since the new Mayor of London began work. It has included criticism and praise for the housing plan from experts with lots of knowledge, information and insights. There are those who suggest that guaranteeing 50% of new homes built in London are affordable isn’t really achievable. And, there are those who say, that with some changes and over time, it is achievable.
Property developers who build in London have stated that one way Mr. Khan’s 50% affordable housing plan could be achieved would be to lower the market rate for land so the finances work out for both builders and potential purchasers of the finished homes.
Berkeley Homes Chief Executive Tony Pidgley told a conference that the Government needs to set specific levels so prices can be adjusted accordingly. “Fix [the level of affordable housing] at 30% and fix rent and cross-subsidy it,” he said.
Another answer to London’s housing crisis could be to combine greater use of Government Brownfield Land with another look at London’s Greenbelt. While the idea of a Greenbelt around built up areas is a good one, it’s worth looking at just how ‘green’ and useful to near-by residents it actually is and if it wouldn’t be more useful to build on a little of it.
While no simple answer is readily available to achieve Mr. Khan’s affordability plans and help solve London’s housing crisis, it does appear that there could be a way forward, provided all sides make changes and allowances. So, although there may be a possible solution with much more affordable London housing in the future, we wouldn’t recommend making any plans to buy or invest for some time yet!